StockCall Scrutiny on Bank of New York: Growth Amidst Tough Operating Environment

LONDON, January 18, 2013 /PRNewswire/ --

The volatile global economic environment and stricter regulations since the financial crisis has meant that the operating environment for asset management industry, which includes hedge funds, private equity funds and mutual fund companies, has been tough. Still, the performance of the asset management industry has been robust. Our analysts have issued a technical analysis on Bank of New York Mellon Corporation (NYSE: BK), which is available for free. Sign up now at

http://www.stockcall.com/analysis  

Earlier this week, Bank of New York Mellon Corporation (NYSE: BK), an investment management company, reported strong results for the fourth quarter of 2012. BNY Mellon posted sturdy year-over-year growth in fees in its Investment Management, Asset Servicing, Clearing and Treasury Services businesses for the fourth quarter. Our free technical analysis on Bank of New York Mellon is available at

http://www.StockCall.com/BK011813.pdf

Gerald L. Hassell, Chairman and CEO of BNY Mellon, said that the company benefited from the improvement in market values and, more importantly, from its relentless focus on generating organic growth with its broad client base. Hassell said that the company is driving its operational excellence initiatives to improve its efficiency and help mitigate the impact on its high margin revenues due to the low interest rate environment and tepid capital market activity.

At the end of the fourth quarter, BNY Mellon's assets under custody totaled $26.7 trillion, up 9% over the same period in the previous year.

Looking ahead, BNY Mellon expects their debt ceiling issue to remain a worry for investors. Speaking at a conference call after the release of quarterly results, the CEO said that there is still an enormous amount of cash sitting on the sidelines waiting for better certainty and clarity.

Since the financial crisis, investors have become more risk averse and are conducting stronger due diligence on investment managers. However, asset managers such as BNY Mellon are in a position to respond to clients' requirements due to their size. Larger asset management firms such as BNY Mellon are also in a better position to adapt to stricter regulatory environment.

While the financial crisis had a significant impact on the entire asset management industry, private equity business suffered the most. Following the crisis, quality deals and funding dried up. However, the slump in the private equity business may be coming to an end.

Earlier this week, reports surfaced that personal computer maker Dell Inc. is in talks with private equity firms over a possible buyout. If Dell goes ahead then the transaction would be one of the biggest leveraged buyouts in the Technology sector. It would also mark the return of mega leveraged buyout deals, which were seen before the financial crisis of 2008. Dell apparently is in talks with private equity firm Silver Lake Partners for a possible.

The Wall Street Journal(1), citing people familiar with the situation, reported that Blackstone Group [Free Research Report on BX](2) has also been approached by Dell's bankers to come up with a bid for the personal computer maker. However, a person familiar with the matter told WSJ that Blackstone is not contemplating a bid at the moment.

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  1. Source: Wall Street Journal Article - Bankers Reach Out to Blackstone, Others to Test PE Interest for Dell Bids [ http://blogs.wsj.com/deals/2013/01/17/bankers-reach-out-to-blackstone-others-to-test-pe-interest-for-dell-bids/?mod=MarketsMain ]
  2. The Blackstone Group L.P. Technical Analysis [ http://www.StockCall.com/TheBlackstoneGroupLP011813.pdf ]

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